Asia: Stocks finish higher as Chinese stimulus hopes grow

Asian stocks finished the week higher, with China’s stocks rallying the most since 2009, as hopes of further stimulus grew.

Hong Kong’s Hang Seng index rose 0.71% to 24002.64, while the Shanghai composite increased 0.59% to 3324.39.

Worse-than-expected manufacturing data earlier in the week raised speculation that the People’s Bank of China might increase stimulus measures.

The market was also boosted by news on Thursday that China may allow wealth management products sold by its commercial banks to invest in domestic bond and stock markets.

Such a move may stem the flow of investible funds into trust companies involved in the risky shadow banking sector.

In Japan, the Nikkei 225 ended up 0.19% to 170.88, as the Japanese yen weakened against the dollar to support exports.

Bank of Japan member Takehiro Sato said inflation may stall until around the middle of next year due to falling oil prices. However, he had opposed additional monetary easing at a BOJ policy meeting in late October because he believed that the economic mechanism was working.

He warned against focusing too narrowly on short-term price moves as the BOJ is already buying “excessive” amounts of government bonds.

“It’s inappropriate to tie monetary policy decisions too much to monthly consumer price moves,” he told a news conference after meeting business leaders in the western Japan city of Kochi on Thursday, suggesting that several months of weak inflation data won’t warrant additional monetary easing.

Company-wise, Haitong Securities gained after the brokerage said it is in talks to buy Portuguese investment bank Banco Espirito Santo de Investimento SA.

Bank of China advanced 4.5% after falling as much as 3.1%.